When the Betamax/VCR first came out, Hollywood insisted that it was pure evil and that it would be “the Boston Strangler” to the movie business. And, if you looked at how the devices were used at first, you could easily argue that the vast, vast majority of the usage was, in fact, infringing. In part, that was because the movie studios were so freaked out about such devices, they couldn’t even comprehend offering licensed movies for home viewing at the time. Instead, the device was purely about “theft.”…

Fairness

Always put on your skeptic hat when someone appeals to your sense of fairness. It’s a good general rule.

I think of myself as someone with a strong sense of decency and concern, I trust my own sense of fairness. But when someone uses it in an argument, I shy the away with natural distrust.

Not just because it’s a subjective term with no fixed meaning, but also because “fairness” often encourages people to act against their own interests. We generally file “fairness” in the same folder where our brains keep “altruism.” But in these cases, it should be kept closer to “righteousness.”

Fairness in Game Theory

Game theorists have a test called Ultimatum, wherein volunteers are divided into groups of two people. Money is given to one member of each group and he has to offer some portion of it to the other. If the second person accepts the offer, they both get to keep the money, but if the second person rejects, they both lose the money.

In theory, the second person should be willing to accept any amount, even a penny, because it will leave him better off than if he got nothing. But in practice, at some point the second person’s sense of fairness kicks in and he chooses to get nothing rather than let the other get what he sees as an unjust gain. So while at 50-50 splits are nearly always accepted, people start rejecting at 40-60 and by about 20-80, most players reject the offer, sacrificing their own gain in order to deny the other an “unfair” gain. (Some tests go further to show people rejecting their “unfair” gain even when nobody gets the other portion. Below a certain fairness level, they just don’t want to play.)

Fairness with Monkeys

In this study, pairs of monkeys perform an action earning a reward. For reward, one monkey is given cucumber while the other is given a grape. The cucumber monkeys are satisfied until they see the other monkey get the grape. Then some cucumber monkeys get so upset they throw the cucumber at the researcher, choosing to forgo the perfectly serviceable snack rather than participate in an unfair activity.

There’s a great TED video on the subject:

Fairness in Copyright

Without getting into the copyright maximalist/fair use maximalist dispute, but instead looking at it from a practical standpoint, I see authors and publishers shutting down uses of their works they deem a violation of their rights, even if the use causes them no harm, even if the use benefits them.

Whether it’s CBS or J.K. Rowling going after fan fiction that keeps their work fresh, or Viacom shutting down Youtube videos that amount to free advertising, there is an overly legalistic approach that seems focused more on making sure all benefits go to the “right” people than on maximizing the benefits they actually get.

They have the right (probably, usually). But why do content creators and owners deny their own fans the ability to do something creative or just plain fun with their creations?

The entertainment industry in all its various forms has a long history of opposing the very technologies that keep their cash cow lactating. Home video, radio broadcast of baseball games, movies (free!) on TV (more TV), all faced legal challenges by at least some content creators when new.

Which brings us to Pinterest.

Pinterest, surprisingly, is valued at 200 million dollars. “Surprisingly” because it’s on very shaky ground copyright wise. There’s been some controversy over Pinterest’s TOU because they use boilerplate “I promise not to infringe and I won’t ask Pinterest to help if I get into trouble,” language while having the non-boilerplate business model of infringement. They even encourage users to Pin other people’s work (users are urged not self-promote).

Under the law, Pinterest’s business model is probably fatally flawed. In fact, Pinterest sounds a lot like Napster. Except for one major difference–no Pinterest user would have bought these pictures they are now getting for free. So no argument can be made that the creators are losing money.

Pinterest user activities present rights owners get a great new vehicle for publicity. All free of charge. Pinterest’s users are unpaid, volunteer, often enthusiastic promoters.

But is free publicity good enough to stop the lawsuits? I doubt it. And the reason is…fairness. It’s not fair that people who don’t own these pictures are doing neat things with them without paying.

Beware the Monkeys’ Warning!

The major content owners have spent years trying to control piracy by threatening their customers. So let’s go back to the monkey video. In an altruism experiment (see 10:30 for the whole presentation, or 12:05 for the results) where monkeys were again paired and one monkey decided whether another monkey would get fed, intimidation by the other monkey was by far the least successful strategy for eliciting cooperative behavior. Less successful even than doing nothing.

I never cared much for Facebook. I have an account, I have 100 friends (mostly my big Irish Catholic family), I post on it almost daily. But without passion. There’s no love for the Facebook.

My participation comes from a sense of obligation because I’m interested in social media and this blog is primarily about how social media changes (or should change, or, more likely, will change, whether they like it or not) the litigation equation for companies protecting intellectual property. When to sue? When to find a softer solution?

The days when it was safe to trust this decision to Legal are drawing to a close. Marketing and Public Relations need to be consulted as well.

But I don’t get what’s so special about Facebook. As far as I can tell, it’s Friendster 3.0, the flavor of the moment. It’s been done before, it will be done again. Will we get this excited about Friendster 4.0 when it comes out in a few years? Probably.

And some of what I see makes me think Facebook is already past its prime. If it is valued at 100 billion on IPO day the way some people think it might be, then I’d say the play of the year is shorting Facebook.

Among other of his discoveries, Carlton presents a fascinating juxtaposition regarding something called authentic identity (basically, “be who you are”).

To its users, Facebook says, “Representing yourself with your authentic identity online encourages you to behave with the same norms that foster trust and respect in your daily life offline.” Then, a little later, to its advertisers, Facebook says, “Because authentic identity is core to the user experience on Facebook and users generally share information that reflects their real interests and demographics, we are able to deliver ads that reach the intended audience with higher accuracy rates compared to online industry averages.”

While I appreciate and, from an idealistic standpoint, share Mr. Carelton’s antagonistic take on advertising, I can’t argue with Stephen Green’s observation that “[w]hen a service is free, you are the thing being bought and sold.”

Are you familiar with the term “Streisand Effect”? I wasn’t until reading a recent Techdirt article about the ham handed efforts by Gamestop to keep a competing software developer out of the market, and in so doing giving that developer more free publicity than they likely had the resources to buy. Ms. Streisand received the honor of this term after attempting, citing privacy concerns, to force a photographer to remove an aerial photo of her house from an online collection of coastline photographs (her house was shown but not identified in the photo), resulting in hundreds of thousands of page views.

Here at Timothy 3.0, I try to highlight those moments when a legal team inadvertently creates a PR problem for a company because they did not consider how the new rules of social media turn every aspect of business in potential fodder for public debate. Today, everything a company does is Marketing, not just advertising, not just interactions with customers and the press, but competitors, critics, any person or entity within and without the company. Because you never know what will go viral.

The Streisand Effect is not quite the same thing, but similar enough to be one of those moments when I think I’m on to something new only to find it’s so common there’s a name for it.

Patent law is as broken as the rest of intellectual property, but since patent deals with inventions, rather than ideas or expressions as with most other branches of IP law, its problems are unique to it and outside my general area of interest. That being the intersection of social media and intellectual property rights enforcement.

As a result, I rarely post on patents. That won’t change, but there is a growing drumbeat of discontent in patent law, especially as it relates to software patents, where social media was and continues to be birthed and where the patent system is seen as a way to stymie the competition rather than promote innovation. There is also a sense that the patent reform in congress will do little or nothing to fix the real problems.

Or from the Guardian, “Patents are now a multibillion-dollar industry in which companies find it more attractive to make money suing each other for infringement than actually making things.”

Mike Masnicjk, writing in Techdirt recently suggested several fixes that should be, but are not being, considered by congress as it drafts patent reform. My favorite suggestion regards obviousness. As most of you are aware, one of the requirements of patentability is non-obviousness, but the standard is so low as to be laughable. How obvious does something have to be before it stops being non-obvious?

Masnick points out that independent invention should be a defense against patent infringement in much the same way that it is in copyright. And he goes further and claims that independent invention should be evidence of non-patentability. Which makes perfect sense to me, give “non-obvious” some teeth.

Recognize that independent invention is a sign of lack of patentability: This one is a bit more controversial, but the point of the patent system is supposedly only to reward patents on inventions that are non-obvious to those skilled in the art. If multiple people, skilled in the art, are coming up with the same thing independently at the same time, it seems like pretty strong evidence that, in fact, the ideas were obvious to those skilled in the art.

This seems so obvious to me that if it is, as Masnick says, controversial, that’s just more evidence that the system is broken. Read the whole thing, it’s not long and doesn’t require a lot of patent knowledge.

Sell something, anything, under a name that includes the word “Monster” and sooner or later you will likely receive a cease and desist letter from Monster Cable Inc., a company that has earned a reputation for coming after anyone who uses the word “monster” in anything but its literal sense (and sometimes even then, as Walt Disney found out while merchandising creatures from the movie Monsters Inc.).

Really? Maybe for other sellers of home entertainment accessories, Monster Cable’s product area, but, say, a mini-golf course? A trademark does not typically extend further than the goods used under the name. And Monster Cable does not sell used clothes or operate golf courses.

Monster has a defense for this. They consider their mark “famous,” a term of art in Trademark law that gives extra protection to marks that are so intertwined with the company that no other company can use them. Take Coke or Pepsi, for instance. Nobody but the Coca-Cola Company or PepsiCo can use those names no matter the product being sold.

But is the Monster Cable mark famous? According to J. Thomas McCarthy, author of “McCarthy on Trademarks and Unfair Competition,” the very treatise Monster Cable cites for its claim, such a designation cannot be claimed by a company, it must be granted by a court and no court has so granted.

Nevertheless, Monster Cable clearly wants the famous designation and vigilance in protection is key to maintenance of Trademark rights. Can they be faulted for concluding that protecting the mark as though it were famous will make such a judicial grant more likely?

As an added wrinkle to Monster Cable’s spate of seemingly frivolous suits, they often win (or at least gain in settlement). Monster.com added a link to Monster Cable on its website (check the bottom, it’s small but it’s there). The Boston Red Sox changed their marketing for the seats above The Green Monster (so called since 1947).

Their most notable and celebrated losses were not to big players like the Discovery Channel’s Monster Garage, but to little ones like Monster Mini Golf, of all places.

So how did the little guy win? “We blogged nonstop, around the clock, for weeks, and enlisted much of our staff to do the same,” says Christina Vitagliano who along with her husband Patrick founded Monster Mini Golf. Monster Cable received at least 200 angry consumer complaints. After speaking with the Vitaglianos, Mr. Lee decided to drop the lawsuit and agreed to pay up to $200,000 of their legal expenses. “We have made the decision,” says Mr. Lee, “that public opinion and that of our valued customers is more important than the letter of the law that requires us to prevent the dilution of our mark [or] risk losing it.”

Monster Cable probably deserves the complaints it gets, but this can’t be mere mean spiritedness. It’s too expensive, the victories too meaningless, the damage to their reputation real and growing.

They want the prestige of having a famous mark and both the courts and the law tell them this will help them get it. They’re not crazy and they’re not wrong, even though they should be.

I wrote the following for the HuffingtonPost blog of the New York Public Library. It is a review of a presentation I attended about using social media as a marketing tool. It is my view, which I will hit on repeatedly here, that companies and firms need to alter their IP enforcement practices in the new world of social media. An important first step is understanding what social media is all about.

Like Is the New Link: Attracting Clients in a Social Media World

By Timothy Maguire

Almost half of the world’s Internet users are on Facebook. But how many are “likable?”

For anyone with something to sell, this is a particularly tricky question. Dave Kerpen found a great example of how to be charming and oh-so-subtly self-promoting while checking in to a Las Vegas hotel recently.

After waiting in line 45 minutes, Kerpen, the founder and CEO of the social media marketing site Likeable Media, tweeted his annoyance. Minutes later he got a response. From a different Vegas hotel. “Sorry to hear about your trouble,” the tweet said. “We hope you enjoy the rest of your stay in Las Vegas.”

That subtle, restrained little tweet impressed Kerpen enormously. In a free lecture at The New York Public Library’s Science, Industry and Business Library on Monday, he held it up as an example of how companies — anyone, really — should be marketing and monitoring themselves on social media. Continue reading →

IP can be among a company’s most valuable assets. Recognizing this fact, state and federal statutes give rights holders powerful weapons to punish infringement. And in doing so, they encourage aggressive prosecution. Trademark law goes even further; failure to enforce Trademark rights can result in loss of those rights.

This attitude is understandable up to a point. But there is a downside that the law does not take into account—public disapproval of companies perceived as “sue happy” can damage goodwill. Continue reading →

Righthaven burst onto the scene a couple years ago with a hot new business model–partner with a content provider (copyrights holder) and sue everybody who uses that content without permission for copyright infringement. Derided as a lawsuit factory, Righthaven has been hit with a string of losses that have not only threatened the whole operation but have placed the lawyers themselves of jeopardy for fraud upon the court.

Most of us have a nemesis, someone who makes our life difficult, who we can’t help but wish bad things for. Usually, it is an unrequited wish. Revenge is not sought or achieved, justice is not done, life goes on without satisfaction. In fact, it’s quite rare that someone’s fondest wish for their worst enemy comes true, it’s an event normally reserved for Hollywood screen writers. But Righthaven LLC, the bane of bloggers and fair use advocates everywhere, is in the process of giving their enemies just such a present as they melt down in spectacular and very public fashion.